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Former Emery County economic development director Mike McCandless double-dipped, according to the state auditor.

He billed a high-tech company for $20,000 in consulting fees three years ago while simultaneously arranging a state grant for the firm.

Now, McCandless is under investigation by the Emery County attorney and sheriff for taking payments in 2012 from Heber City-based Conductive Composites.

The company's founder says county leaders were aware of the arrangement and even approved it. Conductive Composites Chief Technology Officer George Hansen says his company only paid McCandless for work "above and beyond" his government duties.

"We tried to draw a line," Hansen said.

State investigators, however, concluded that line was blurred in a recently released audit. McCandless accepted illegal compensation, used his office to secure special privileges and failed to disclose financial dealings with a firm he was regulating, their report states.

Auditors faulted county leaders for their lack of oversight.

Conductive Composites, a military supplier in business since 1995, applies nickel coating to carbon fibers for antennae and other high-tech applications.

According to invoices the state auditor obtained through a subpoena, the company paid McCandless $68 an hour to help land Rural Fast Track grants administered by the Governor's Office of Economic Development.

Other tasks McCandless billed for included building inspections, negotiating rights of way and easements, conducting tours of facilities, and arranging meetings with banks and utility companies.

"All of these billed services were within the scope of the Director's responsibilities with the County; therefore, he was compensated by both the County and [Conductive Composites] for the same work," the audit states.

Hansen, however, rejects that characterization, claiming he paid McCandless only for work that went beyond the scope of his county duties.

"If Mike is doing is something like introducing us to GOED, that's one thing," he said. "But if you are talking to Rocky Mountain Power or a landlowner on our behalf, I don't think that is a free lunch, so we paid."

Voice messages left with McCandless were not returned.

Before the audit became public last fall, Emery County officials accepted McCandless' resignation and referred the matter to the county attorney and sheriff to determine whether he should return any of the money he was paid.

Commission Chairman Ethan Migliori disputed some of the Nov. 17 audit's key findings, although he does not know what his former commission colleagues knew about McCandless' financial ties with the company.

"It was before my time," said Migliori, who took the helm last month. "I've been on [the commission] only two years and we have two new [commissioners] this year."

Conductive's $40,000 loan was issued by an independent nonprofit organization, not the county as the audit suggests, the new chairman said. The county does assign its staff to handle the paperwork for those loans, Migliori added, but McCandless had no influence over who got them.

The audit, which was initiated after a citizen left a tip on the agency's complaint hotline, criticized the county's failure to exercise meaningful oversight.

"When a public official uses their position to secure special privileges for themselves or others, it erodes public trust, creates an opportunity for dual compensation, and the opportunity to use their public position in their best interest rather than the best interest of the government entity," wrote state Audit Director Van Christensen. "These errors occurred due to the Director's poor ethical judgment and inadequate oversight by the County Commission."

Christensen's findings were not challenged in a formal response written by outgoing commission chairman Jeff Horrocks, who lost his bid for re-election at the 2014 GOP county convention.

Horrocks did commit to improve financial controls and employee training.

Emery County law enforcement personnel acknowledge they are looking into the case.

"It's under investigation," said Deputy County Attorney Brent Langston. "There is nothing I can comment on at this time."

After 10 years on the job, McCandless left the $68,000-a-year post on Oct. 24 to work in the private sector. According to his LinkedIn profile, McCandless works for a Utah environmental services firm called Epic Engineering, also based in Heber, where he works on government and community affairs, project management and rural outreach.

At the time Conductive applied for state grants and the loan, the firm was expanding its operations in Green River and was pursuing a small manufacturing center in Cleveland, south of Price.

The company received a $50,000 Fast Track grant to purchase equipment for its plant at the Green River airport, according to GOED spokesman Michael Sullivan. But the agency declined to offer a grant the company wanted for the Cleveland center, which will replace its Green River operations.

The state economic development program has spent up to $1 million a year awarding competitive grants of $40,000 to $50,000 to companies hoping to build their operations in Utah counties with fewer than 30,000 residents.

After questions from The Tribune, GOED executives reviewed Conductive Composites' award and determined that the company had qualified for the competitive grant and met performance benchmarks.

However, state economic development managers were disturbed McCandless, who had submitted a mandatory letter of endorsement to the agency, did not disclose the fact that Conductive Composites employed him, Sullivan said. Had GOED known, it would have insisted he recuse himself from the award process, he added.

But McCandless' endorsement letter describes a longtime professional relationship with the company.

"I have been working with Conductive Composites since 2008 to assist them in transitioning from a research and development firm to a manufacturing company," McCandless wrote. "To assist this transition, two of the local revolving loan fund boards that I work with have extended loans to Conductive and have used this leverage to help the company improve its operational capacity."

The letter heaped praise on Conductive.

"I honestly see them as a $50 million per year company in the next 10 years," McCandless wrote. "They have worked diligently to build this business and have been very successful. I believe this expansion is [a] significant step towards growing a company that we will all look back and be very proud of what we were a part of."

If criminal charges are filed, McCandless' rosy predications could fall flat.

Under Utah's County Officer and Employees Disclosure Act, public officials engaging in the conduct described in the audit are guilty of a class A misdemeanor and must be removed from office.

McCandless told state auditors he did not know he was required to disclose his financial dealings with Conductive.

But Hansen, his one-time benefactor, believes McCandless will be cleared because county leaders at the time approved the deal, and, he said, McCandless deserves it.

"It was all very open," he said.

"No. 1, it is true we used him where his county job stopped. If there was a gray area, shame on us," Hansen said. "No. 2 is he is a good man. Sometime you have to wear 20 hats when you work for a little county like that."

Twitter: @brianmaffly